Concept explainers
Concept Introduction:
Bank Reconciliation:
Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares
To Prepare:
The bank reconciliation statement
Answer to Problem 5.22E
The bank reconciliation statement is as follows:
Bank Reconciliation Statement | |||||
As of August. 30 20Y9 | |||||
Bank Side | Book Side | ||||
Balance as per Bank statement | 17325 | Balance as per | 6,800 | ||
Add: | Add: | ||||
Deposit in transit | 2,175 | Note collected | 7,500 | ||
Interest on note | 600 | ||||
Check Error | 450 | 8,550 | |||
Less: | Less: | ||||
Outstanding Checks | (4,190) | Bank Service Charges | (40) | ||
Reconciled Balance | 15,310 | Reconciled Balance | 15,310 |
Explanation of Solution
The bank reconciliation statement is prepared as follows:
Bank Reconciliation Statement | |||||
As of August. 30 20Y9 | |||||
Bank Side | Book Side | ||||
Balance as per Bank statement | 17325 | Balance as per Cash Book | 6,800 | ||
Add: | Add: | ||||
Deposit in transit | 2,175 | Note collected | 7,500 | ||
Interest on note | 600 | ||||
Check Error | 450 | 8,550 | |||
Less: | Less: | ||||
Outstanding Checks | (4,190) | Bank Service Charges | (40) | ||
Reconciled Balance | 15,310 | Reconciled Balance | 15,310 |
Concept Introduction:
Bank Reconciliation:
Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares bank reconciliation statement and it has two sides; Bank Side and Cash side
To Indicate:
The cash balance to be reported in the balance sheet
Answer to Problem 5.22E
The cash balance to be reported in the balance sheet is $15,310
Explanation of Solution
The bank reconciliation statement is prepared as follows:
Bank Reconciliation Statement | |||||
As of August. 30 20Y9 | |||||
Bank Side | Book Side | ||||
Balance as per Bank statement | 17325 | Balance as per Cash Book | 6,800 | ||
Add: | Add: | ||||
Deposit in transit | 2,175 | Note collected | 7,500 | ||
Interest on note | 600 | ||||
Check Error | 450 | 8,550 | |||
Less: | Less: | ||||
Outstanding Checks | (4,190) | Bank Service Charges | (40) | ||
Reconciled Balance | 15,310 | Reconciled Balance | 15,310 |
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Chapter 5 Solutions
Survey of Accounting (Accounting I)
- Which of the following items are found on a book side of the bank reconciliation? A. beginning bank balance B. outstanding checks C. interest income D. error made by bankarrow_forwardWhat is the purpose of the bank reconciliation?arrow_forwardWhich of the following are found on the bank side of the bank reconciliation? A. NSF check B. interest income C. wire transfer into clients account D. deposit in transitarrow_forward
- Identify where each of the following transactions would be found on the bank reconciliation. Table 8.1arrow_forwardWhich of the following does not explain the differences between the bank statement balance and the customers cash balance? a. Deposit in transit b. Canceled checks c. An NSF check d. Errors e. Interest incomearrow_forwardA bank reconciliation takes time and must balance. An employee was struggling in balancing the bank reconciliation. Her supervisor told her to plug (make an unsupported entry for) the difference, record to Miscellaneous Expense, and simply move on. Discuss the internal controls problem with this directive.arrow_forward
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